What’s a builder to do?

Go belly up, I think, or at least, many of them will. Of the 549 single family houses currently listed for sale in Greenwich, 113 of them were built in 2005 or later (104 of those were built after 2005). While a few of these have sold once and are now back on the market, even more new houses are hiding behind their builders having moved into them or rented them out for less than their carrying costs.

So let’s assume that 113 is a rough figure of unsold spec houses for sale. Their prices range from $25 million to $1.350 million and, while I won’t say that I’ve seen every single one, those I have seen are, without exception, suffering under handicaps like poor location, poor land, crazy prices, etc. I don’t expect any of them to sell for their current price. Many of these houses probably still have some profit built into their prices; many do not. Some builders have the financial strength to take a big hit; many more do not.

This happens every cycle – builders get wiped out and are replaced with a new generation of optimists. I think we’re going to see more of that this year, however, than we ever have before.


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4 responses to “What’s a builder to do?

  1. CEA

    One day, i’d love to hear about the “last wave” of builders – who they were, what houses they built – and maybe get someone (you, CF?) to call them and ask them their thoughts and advice, with hindsight.

  2. christopherfountain

    I’d do just that, if they still had phones. I do wonder where Gary Flyer is, and whether he ever returned from Europe – Marc Rich did, but he had an ex-wife to give Clinton millions.
    And, more currently, what’s happened to Richard Harris? Very active, now he seems to have disappeared.

  3. Nicholas

    Gary Flyer…there’s a blast from the past. No, he never stiffed me, because I’d have nothing to with him.

    Now, Matt Mathews is another story…I’d love to find that little shit….

  4. christopherfountain

    Matt’s book keeper stole $13 million from the company (and what does that say about the firm’s principals’ attention to business?) and is currently doing something like 6 years. If she doesn’t get time off for good behavior, she’s got 3-4 years left. Matt is not in jail, that I know of. And the last time I saw him, he hadn’t grown any taller, either – perhaps that will quench your thirst for revenge.